Call by business to break logjam in Brexit talks

Tuesday, November 28, 2017 - 07:15 AM

An industry group of British and Irish firms is seeking to break the apparent logjam in the Brexit talks by promoting a new customs agreement, which it believes will lift the threat of a new hard border and see off a political bust-up over the Good Friday accord.

The British-Irish Chamber of Commerce said that an agreement with the UK, which was based on a broader version of the existing customs agreement between Turkey and the EU, could boost the talks as the clock counts down to the Brexit summit in December.

The “guiding principles” for a deal would eliminate an Irish border, remove the threat of tariffs for UK trade with the EU, and allow for a transition deal of “adequate length” for the new trade agreements to bed in, the chamber said.

The main principles to helping strike an agreement include the UK securing control over migration — which would effectively mean that the Theresa May’s government gets its wish to leave the single market and no longer be under the auspices of the European Court of Justice, as well as maintaining existing regulations over manufacturing and food production.

“This proposal, of all those currently under consideration, falls closest to what the UK has already proposed in its position paper on future customs arrangements,” the chamber said.

But it added: “This proposal is more considerate of the EU position and market protection concerns than the UK proposal for a customs partnership with the EU.”

The chamber said that its proposal would go well beyond the existing Turkey-EU customs agreement, which was struck over 20 years ago, to include agriculture products.

“Given that both the EU and the UK are currently equivalent in trading and regulatory standards, such an ambition is achievable provided the right safeguards are put in place and adhered to,” according to the chamber.

The Turkish customs union includes industrial goods but excludes unprocessed agricultural products, services, or public procurement.

“Both parties in the negotiations have spoken of their desire to find a deal that protects the open border on the island of Ireland and this paper offers a possible solution to this challenge,” John McGrane, director-general of the British Irish Chamber said. “It also seeks to ensure that UK-Irish trade is not unduly undermined by the Brexit process but rather encouraged to grow after we get through this difficult phase,” he said.

Writing in the Financial Times, Niall FitzGerald, former chief of multinational Unilever and a member of the British-Irish Chamber, said that with the drop in sterling and jobs already leaving the UK “all sides must recognise that a hard Brexit will be disastrous and inexcusable for those who permit it”.

Meanwhile, Tom Healy, director of the Nevin Economic Research Institute, said that there currently “no good options” in the Brexit talks.

“However, the least-worst option would appear to be continuing UK membership of the [single market] and the customs union for as long as possible and for as much as possible across all sectors and domains of the four freedoms, relating to labour, capital, goods and services. “Failing that, some sort of special status for Northern Ireland would be the least worse in the long-run,” Mr Healy said.